As Apple begins tapping a wider range of Taiwanese manufacturers to build its iPhones and iPads, Taipei is becoming a little quieter as executives try to avoid revealing anything about one of the world’s most closely watched brands. The sudden coyness during Taiwan’s earnings season is almost confirmation in itself that these contract manufacturers have iPhones and iPads in the back rooms.

A lot of the focus has been on Wistron Corp. and Compal Electronics Inc., which will be assembling some iPhone 5Cs and iPad minis, respectively. Read More »

Facing falling margins, Taiwan’s personal-computer contract manufacturers are investing in assets that will move them away from their core business, into areas as diverse as making contact lenses and recycling plastic. Less than half of Pegatron Corp. and Wistron Corp.’s revenue this year is expected to come from
their laptop operations, which has been their main focus.

Margins are hovering around 10-year lows, and analysts say consolidation makes sense in a sector that is starting to feel crowded as consumers increasingly buy mobile devices instead of laptops. Taiwan’s PC contract manufacturers say mergers are unlikely, at least in the near term, but they have been interested in doing deals in other sectors to help reduce their reliance on PCs.

“Taiwan’s tech sector, across the spectrum . . . should consolidate, but likely won’t — CEOs are founders, they don’t want to sell,” said Nikhil Eapen, Citigroup’s head of telecommunications, media and technology for Asia Pacific.

Taiwanese contract manufacturers have long made most of the world’s computers. But their business model of churning out commoditized laptops from Chinese factories is increasingly under threat as margins shrink and consumers shift to mobile devices.

Wistron Corp.

Wistron Chief Executive Simon Lin

Executives of Taiwan’s Wistron Corp., which manufactures one of every seven laptop computers sold world-wide, recently spoke with the Wall Street Journal about why their latest endeavor is a $21 million U.S.-based electronics recycling plant. They also talked about how labor shortages in China and shifting consumer preferences are forcing big industry changes.

The following is an edited version of the interview with Wistron Chief Executive Simon Lin and Joseph Hsu, general manager of the company’s U.S. subsidiary Wistron GreenTech Corp. Read More »